Lord Garnier: My Lords, this amendment is grouped with an amendment proposed by the noble Baroness, Lady Brinton, and is supported by the noble Baroness, Lady Bennett of Manor Castle. Unfortunately, she cannot be here, so noble Lords will have to deal with me, and I hope I will not detain the Committee very long. I should declare an interest in that I am a barrister in private practice and some of the work that I do involves fraud, bribery and money laundering offences; at least, some of the clients I represent sometimes become involved in that sort of thing. Sometimes, I act for the Serious Fraud Office in prosecuting and dealing with those accused or thought to have been guilty of such things.
The new clause set out in Amendment 112 is designed to require a review to explore how domestic and overseas victims of fraud, bribery and money laundering offences could be better compensated without the need for civil proceedings to recover their losses or compensation. The terms of the new clause are set out on the amendment paper, so I shall not read it out: it is there for those interested to see.
Just before Christmas last year, in December 2023, a company called Entain entered into a deferred prosecution agreement with the Crown Prosecution Service in response to allegations, which it admitted, that part of Entain had failed to prevent bribery in, most often, Turkey, over a seven-year period. The deferred prosecution agreement that Entain, formerly Ladbrokes, agreed to contained terms which included that it should pay a penalty and a disgorgement of profits of £585 million, plus a charitable donation of £20 million. Prior to that, in the decade or so before the Entain case, multinational companies were fined more than £1.5 billion after investigations by the Serious  Fraud Office into corruption abroad, but only 1.4% of those fines, about £20 million, was used to compensate victim countries, according to research by the law firm Reynolds Porter Chamberlain and, in particular, due to the hard work of Mr Sam Tate, a partner of that firm, who, with others in the firm, has made a particular study of this pattern. It seems to me that companies that are convicted in this country of offences which have an effect overseas should be required to compensate their victims overseas—we need to change that.
Much of the corruption involved in these cases has occurred in African countries that are already suffering terrible economic hardship from food and energy crises and from inflation. They are in dire need of economic support to repair the damage caused by corruption. Our own Government have been vocal in their support for compensating foreign state victims of corruption, but the action taken to compensate them tells a different story and, if I may say so, leaves us open to charges of hypocrisy.
Most corruption cases brought before the English courts involve foreign jurisdictions. Therefore, this country is stepping in as the world’s policeman and prosecuting crimes that take place in other countries but keeping all the fines for the Treasury here in the United Kingdom. That is important because corruption causes insidious damage to the poor and the not so poor, particularly in emerging markets. The United Nations has said that it impedes international trade and investment, undermines sustainable development, threatens democracy and deprives citizens of vital public resources. The African Union estimated that in 2015, 25% of the continent’s gross domestic product was lost to corruption. Every company convicted of overseas corruption in this jurisdiction should, I suggest, be ordered to compensate the communities they have harmed; that would be both just and effective. Compensation should come through investment in programmes targeted at decreasing corruption and benefiting local communities by, for example, building and resourcing more schools or hospitals.
At first glance, English law encourages compensation. It is required to take precedence over all other financial sanctions—so far, so good—but as with many noble ambitions, problems lurk in the detail. Compensation is ordered in criminal cases only where the loss is straightforward to assess, even though the trial judge is usually of High Court or senior Crown Court level—that is to say, judges who deal with complex issues every day. Let me give the Committee a couple of examples.
In October 2022, Glencore, the international mining and minerals extraction company, pleaded guilty to widespread corruption in the oil markets of several African states. I interpose here to say that in that case, now long over, I represented the applicant state seeking compensation. Glencore pleaded guilty and was ordered to pay £281 million in penalties and further orders, but not a single penny has been ordered to go back to the communities where the corruption happened, because it was held that compensation would be too complicated to quantify and the overseas state applying for compensation had no legal standing in the case. You could say that I was very lucky to be allowed to speak at all during the proceedings, because the statute says  that the people who have the legal standing to make an application to deal with compensation are the prosecutor and the defendant company, and I was not representing either of them. None the less, the judge was kind enough and polite enough to let me advance my submissions to him. He rejected them because the statute prevented his acceding to my application.
The second example is the Airbus deferred prosecution agreement case, which tells a similar story. The company was required to pay €991 million to the United Kingdom in fines, but compensation to the numerous Asian companies where the corruption took place formed no part of the deferred prosecution agreement.
The process for compensating overseas state victims, I suggest, needs urgent simplification, so that real money can be returned to them. An answer lies in incentivising the corporations that commit the crimes to pay compensation voluntarily, on the understanding that it would not increase the total amount, including penalties and costs, that they would have to pay. The company could be given further incentive by receiving a discount on the fine that would still be required to the United Kingdom Treasury or an increase to the fine if it refuses or fails to make redress.
The required changes are straightforward and ought to cost the taxpayer nothing. It would create a standard measure of compensation, which would ensure consistency and transparency, as well as avoiding the difficulty of calculating a specific amount of loss or damage in each case. The compensation figure could equal whichever is the higher of the profit made by the company from its corrupt conduct or the amount of the bribes it paid to obtain the profits. This already happens where companies are sentenced, so that the money goes to the Treasury. The defendant company would pay nothing more, but at least some of the money would benefit the victim state.
It would, of course, be naive to think that compensation paid to a foreign state could never lead to further corruption, and it has been suggested that some foreign states might encourage corruption in order to receive the compensation under the scheme that I have advocated, so that the compensation should go into a Swiss bank account or a corrupt overseas Minister’s bank account. That is clearly a risk. To address this, I suggest that defendant companies should be encouraged, or required, to enter into an agreement with the relevant state, which would include obligations to comply with United Nations guidance on the treatment of compensation funds, and to identify projects for which the funds would be used, possibly with the involvement of a local non-governmental organisation. To encourage states to enter into these types of agreements, corporations would be permitted to donate the compensation fund to the World Bank or the International Monetary Fund for projects in the region instead, or to pay down a country’s debt if an agreement cannot otherwise be reached. The benefit of this approach is that, unlike at present, where there is no disadvantage in doing nothing, it puts the onus on the corporation to take restorative action. It also addresses the difficulties in quantifying loss by creating a simple approach that gives companies early sight of the amount that they will have to pay.
These reforms may not need legislation, albeit I know that the Sentencing Act 2020 precludes victims from having legal standing at the end of a criminal case of this nature. This proposed new clause, and this debate, provide, I hope, an opportunity to probe the Government’s thinking. Indeed, what we require is the political will to amend the sentencing guidelines on corporate corruption. If we do this, and if the Government can come forward with their own well-thought-through and well-drafted amendment to the sentencing regime in relation to overseas corruption dealt with in our criminal courts, it seems to me that we can then hold our heads high and enhance our national reputation in the fight against international corruption.
I repeat that this is a probing amendment. I am not expecting an answer of any detailed nature from the Front Bench this evening, albeit my noble friend on the Front Bench is immensely capable of doing such a thing. I urge the Government, through my noble friends on the Front Bench, to give this matter active consideration. It is not a party-political point; it is a point of justice and morality. The time has come for those convicted in our courts here of offences of money laundering and so forth in overseas jurisdictions to pay their victims their due compensation.

Lord Garnier: My Lords, of course I will beg leave in a moment or two to withdraw my amendment. I am very grateful to my noble friend the Minister for his ability, at very short notice, to deal very elegantly  with what I would describe as a long hop. The short point is one I made earlier on—that only 1.4% of the value of fines raised in this country has found its way back, under the mechanisms that he refers to, to victims’ estates. That is not enough. That said, I thank him for his offer of a meeting, which I would certainly like to take up, if I may. I thank my noble friend Lord Sandhurst for his support. I also thank the noble Lord, Lord Marks, for his very thorough response to my suggestions in Amendment 112, and the noble Lord, Lord Ponsonby, for his kind remarks.
The reason why I metaphorically doffed my hat at the noble and learned Lord, Lord Thomas, a moment ago, when the noble Lord, Lord Marks, accused me of being the pioneer of deferred prosecution agreements, is because, yes, as a matter of policy, as a Government Minister at the time, I suppose I was responsible for it. I take some pride in it. However, I could not have achieved it without the co-operation of the senior judiciary. From memory, the noble and learned Lord was president of the Queen’s Bench at the time when the late, much-lamented Lord Judge was the Lord Chief Justice. The two of them, with other members of the senior judiciary, dealt with it impeccably as a matter of legal process. They were not in the least bit interested in the politics—neither was I, actually. We were all interested in trying to make the DPA system work. Thanks to cross-party support in the other place and throughout government, and support from the senior judiciary, the deferred prosecution agreement system came in through statute. I am very grateful to all those who helped with that.
I am in danger of going to the church by way of the moon. This is quite an important subject. It needs thought and proper development. Some ideas need to be tested to destruction, but some need to be given a chance—perhaps through a meeting with my noble friend on the Front Bench and others at the Ministry of Justice—to see which parts of this idea are worth germinating. In the light of all that, I beg leave to withdraw my amendment.
Amendment 112 withdrawn.